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Raleigh, NC, Sells $300 Mln in Bonds

By Munichain News Desk

The city of Raleigh, North Carolina, issued $303 million in bonds to refund a previous issuance.

The bonds mature between 2024 and 2053. They have yields ranging from 2.72% to 4.13%. The securities received a rating of AAA from Fitch Ratings, Aaa from Moody’s Investors Service, and AAA from S&P Global Ratings. 

The rating reflects a “very low leverage position in relation to its very strong revenue defensibility and very low operating risk profile,” according to Fitch.

The issuance comes as Raleigh bolsters its national profile. The city forms one point of the so-called Research Triangle, an area which includes three major research universities in North Carolina and several leading biotechnology companies. Raleigh is home to North Carolina State University, the largest university in the state.

The bonds will be backed by revenue from the city’s water and sewer systems. Last year, those utilities generated $177.5 million in income available for payments on its debt. 

This year, the city owes approximately $60 million in debt service, or about 21% of revenue. Over the next eight years, the city’s debt load will hover closer to $70 million annually, or about 27% of revenue.

BofA Securities Inc, Wells Fargo Securities, and Samuel A. Ramirez & Co., Inc served as underwriters on the issuance, purchasing the bonds for $331 million. The price reflected a premium of $29 million.

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